Treasury Secretary Scott Bessent Talks New Global Tariffs

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Just coming off that announcement from the President announcing a baseline tariff around the United States as well as reciprocal tariffs on certain trading partners. I'm joined by Treasury Secretary Scott Bessett. Mister Bessett was Starcrati. Thank you so much for joining Bloomberg TV. So we're going to have the baseline tariffs come into effect perst first, then they're reciprocal tariffs a little bit more of a different rate for

Well, I think there've been a lot of discussions, but I think we're just going to have to wait and see what would happen. What I would say and Marie is I would advise none of the countries to panic. I wouldn't try to retaliate, because as long as you don't retaliate, this is the high end of the number, and I think the market could have certainty that this is the number barring retaliation. So we've got a ceiling and then we can see if there's a different floor, So.

You sound like you're ready for a negotiation. A number of these partners, has the European Union, has China? Has India? Have these countries reached out?

Well, they've all reached out, But it's going to be up to President Trump to see what he wants to do. I think the mindset might be to let things settle for a while. Their terrafts or non tariff barriers have been on a long time, so we'll see where it goes from here.

When it comes to China, they have a much higher rate on this list. On top of that, there's still that twenty percent fentanyl tariff rate. Is all of this coming together to be more than a fifty percent tariff rate for Beijing?

Well, yes, I think it is, and I think it's a combination of things. And again that I think China said today that solving the fentanyl crisis depends on taking off the fentanyl arraffs, and I'm pretty sure that's not the way the sequencing is.

Going to work.

They're exporting the precursor chemicals and every day, every week, every month, Americans are dying and it's going to.

Have to stop.

When it comes to places like China. The President has mentioned he's willing to even look at things like TikTok to potentially do a negotiation. Then, when it comes to tariffs, I'm sure you're looking at things like the Yuwan. What's on the table when it comes to this trade realignment between Beijing and.

Washington, Well, we haven't started anything yet. We've been busy with the tariffs. I've been busy, as we talked about earlier, the tax bills going very well.

So I think that.

We will move toward the bilateral relationship with China now that we've done the multilateral tariffs.

Plans for conversations or a trip to Beijing. Nothing eminent when it comes to this negotiation. April ninth, these tariffs come in place. Do you plan on having negotiations before that date?

Again, I'm not part of the negotiation, so we'll see. I am sure that they're going to be a lot of calls. I just don't know if they're going to be negotiations.

The President had this huge chart showing all of the different rates. Canada and Mexico notably missing on that chart.

Why is that? I'm not sure that sure?

Okay, I imagine that has to do potentially because they're ready in negotiations previously with the twenty five percent. I'm not sure if you saw the initial market reaction. I haven't, so equity futures slid on the news. You had talked about how we're in a detox period. Do you feel that we're still in that period or are you starting to get a little bit concerned.

Well, the detox period has nothing to do with the terrorists. The detox period is off this incredible level of government spending that we've had an unsustainable amount of fiscal stimulus and looks that's got to stop.

That's got to stop.

So, yeah, can we continue weaning ourselves off of that? And as we see private or public sector borrowing go down, private sector borrowing go up, public sector jobs come down, private sector jobs go up? Is it going to be perfectly symmetrical? Note, but we did see an increase of ten thousand manufacturing jobs last month, So it.

Doesn't concern you today that during the tariff announcement, equity futures sold off when initially they were rallying when the President only announced a ten percent tariff base, and then they fell when he announced the higher rates for things like the European Union in China.

Yeah, and Marie, I've learned not to look what goes on in after hours markets.

Okay, but since the peaks in February, stocks are down eight percent. I think the NASDAC from it's high most recently is down twelve percent so far. Though these kind of this kind of market downdraft so far this year is not concerning you.

Well, look in my old business, I was very concerned about market movements, and I'm trying to be Secretary of Treasury, not a market commentator. What I would point out is that especially the NA NASDEK peaked on deep Seak day. So that's a mag seven problem, not a MAGA problem.

Okay, So let's talk about what else you've been spending a lot of your time doing. You have been up on Capitol Hill constantly. You are really working on trying to make sure that this administration can extend the Tax cuts and Jobs Act on top of that more tax cuts. Right now, How are the conversations going in Congress?

Well, I actually think the most underreported story in Washington, not by Bloomberg of course, is the incredible union enemy unity amongst Republicans. And I think it's President Trump's leadership. But Mike Johnson, with a very narrow margin, issued the reconciliation instructions and then he also passed a clean continuing resolution. On the Senate side, they are variant, attentive, and I think they may have something done by this Saturday.

This Saturday, Okay, that's the start of it, though, that's the start. You recently talked about how you think it's not just going to be tax on tips that gets no tax on tips that gets added to this bill. You think reconciliation can include a plethora of what the President has talked about, no tax on tips, no tax on Social Security. Also recently talking about rebates if you buy an American car, how do you get all of this done?

Deductibility of interest if you buy an American car, which I'm older than you are, but when I bought my first car, the interest was deductible, but now it's got to be only on American cars.

So how do you do all this at the same time that market participants, budget fiscal hawks, budget hawks in Congress are concerned about the deficit. How are you going to have this big reconciliation package?

Well, I think as we've seen there's a lot of room to cut spending. So I think again where Republicans have incredible unity is on the spending cuts as we're seeing.

So when it comes to the timeline of all of this, I do notice that now reconciliation, it seems to be an agreement between the House and the Senate that they're willing to consider about raising the debt ceiling. So do you plan on getting this bill done before the X state, which the CBO is saying could be the middle of the summer or September.

Well, and Marie, I think you just answered the question for yourself, because if debt ceiling is solved via reconciliation, then it has to be done before we hit the X state, and we're going to go onto the warning track sometime in May or June.

So that's when you plan to get this tax bill done.

That's a goal.

So if we could put all both these stories together. Today, the Presidence comes out with tariffs you're working on the tax plan. He talks about tariffs being revenue raisers to offset the tax bill you're working on. At the same time, you and the President also talk about a negotiation you're willing to do to get recied Prossy becomes to other trading partners. How can it be both revenue raising and a negotiation.

Well, to the extent that the tariffs are higher than what we had, it will raise revenues. And you know, as far as the negotiations will see and I could tell you though, it's not going to be possible to include the terriffs in the CBO scoring, So that will be something running in the background. And as the President said, we've taken in several hundred billion dollars on the China tariffs, but those those don't get scored.

Do you feel that you need to have enough revenue raised from these arffs before this reconciliation package comes to play in Congress?

Well, I don't think we have to have the revenue raise. And look, you know we're doing two things. Tariffs are going to raise revenues and then we're also the stamping out waste for an abuse in the government and bringing down the expenses and spending. And we're not going to get credit for either of those with the CBO scoring.

While all this is happening, consumer sentiment has definitely taken a bit of a dive. Expectations for inflation have gone up. Banks like Goldman are cutting their GDP forecast saying potentially the Fed is going to have to cut rates, not the good kind of cuts, the kind of cuts because they're nervous about growth. How concerned are you that the timing of all this is going to be incredibly challenging because of how the American consumer, how corporate America is feeling at this moment.

Well, it tells me a couple of things.

One, we got to get the tax build done quickly, so because that's a componence builder. And two, we're seeing ciniment surveys from the American people, but we haven't actually seen them take action.

If the households actually thought that.

There were going to be employee if their real inflation expectations had increased, what would they be doing. They'd be hoarding goods and they would be demanding wage increases, and neither one of those has happened yet.

So at the moment, you're not concerned about some of the soft data we're seeing.

No, I see nothing.

And one of the great things, many great things about being a Treasury is we have lots of business people come through and everything we're seeing in the economy is still very.

Solid, and executives haven't voiced any of these concerns onto you.

No, there's some idiosyncratic things, but in terms of the expectations actually turning into hard data, none of them.

Messina jet.

Now that you're working on the tax bill, and of course tariffs at the moment are out of the way. What else is on the agenda for you for the rest.

Of the year.

Well, that we have the Ukraine deal that's coming up. We've gone to maximum pressure on Iran. A big part of Treasury is national security, and then we are doing a big push on deregulating in a smart, safe and sound way the regulated financial institutions, which is going to allow for the private sector, not the government sector, to grow.

When it comes to international where are you with a Ukraine and the mineral deal.

I believe we.

May have a team from Ukraine coming over as soon as the end of this week or the beginning of next week. Ukrainians have I believe that they've hired council, And what we did was after the incident in the White House on I believe it was February twenty eighth, we're going to sign a four page deal that with parameters of understanding, and at Treasury we took the opportunity to move forward to.

The big deal.

So this is the exact same deal that would have resulted from the four page signature signature deal.

So we've just fast forwarded.

And we didn't want to lose any time because we believe this deal is so important for the American people, for the Ukrainian people, and for the peace process.

So it sounds like in the next two weeks you're going to have this deal over the finish line.

It's ready on our side.

When it comes to Iran, since you mentioned that, and I know you're going to be focused a lot on international aspects now the tariffs are done and you have the tax deals underway. When it comes to Iran, do you think we could see secondary tariff secondary sanctions, Well.

We've already seen sanctions. For the first time. US Treasury sanctioned a so called teapot refinery, which is a private sector refinery in China and they are the buyers of the Iranian oil and we could see more of that. Wow.

Interesting Church of Secretary Scotts Bessett. You've been very generous at your time today. We really appreciate it here at Bloomberg TV. Thank you so much. Good to see you.